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Travel News and Trends Headlines Update on May 31, 2021

Sequoia warns founders of ‘Crucible Moment’ and advises how to avoid the Death Spiral

In past crises, Sequoia has shared influential memos such as “R.I.P. Good Times” in 2008 and the “Black Swan” memo in Covid 2020.

Sequoia is now back with another warning: “Adapting To Endure”, a 52-page deck (not behind a paywall) about the ‘crucible moment’ for startups, given the prevailing uncertainty and the slowdown forcing layoffs and cutbacks. Some of the key takeaways:

  • No V-Shaped recovery. Startups should focus on extending the runway and fully examining the business to see where costs are out of control.
  • Increased cost of capital. Negative real interest rates led to easy access to capital and record valuations in 2020 and 2021. With rising interest rates, “money is no longer free”.
  • Profits over growth. Growth at all costs is no longer being rewarded.

And on this same topic, here is the email content that was sent by Y Combinator to its portfolio founders, advising them to “plan for the worst”.

Travel Startups and Product-Market Fit

I reached out to the founders of 11 travel startups and scaleups from the US, Germany, Spain, Colombia, and Pakistan to get their brief responses to the following question: Do you consider that you currently have Product Market Fit? (Y/N). If yes, how long did it take you to find PMF, and what made you realize that you had reached it? Here are their answers.

Travel Startups and Product-Market Fit

If I was an OTA. And if I lost my filter…

Christian Watts, founder & CEO at Magpie Travel thinks (and I agree) that OTA executives do a poor job of defending themselves against all the OTA criticism. So he wrote a provocative post with what he’d say in response to the Top 10 most avoided questions asked to OTAs ( “if I was running an OTA, and my PR department was on vacation”, he adds). If I was an OTA. And if I lost my filter.

Have you tried Bionic Reading yet?

Visit Bionic Reading to learn more

Have you tried Bionic Reading yet?

Q1 growth rates public companies

Adding a few more publicly traded companies to the Q2 2022 revenue growth ranking. eDreams Odigeo had the biggest year on year growth by a large margin.

Q1 growth rates public companies

eDreams Prime

“We have continued to make strong progress in revolutionising travel and reinventing the travel experience through the ongoing success of our global, leading subscription model, Prime.” – Dana Dunne, CEO of eDreams ODIGEO, May 2022.

The Prime subscription program, has indeed grown at a very strong pace in the last 5 years:

eDreams Odigeo Prime Subscribers

I’d think that one of the goals of building up a subscription program like this would be in reducing acquisition costs per booking, as subscribers would tend to be more loyal, compare less, and go straight to an eDreams Odigeo brand when they need to book a travel product. This would lead to a reduction in costs mainly from high cost acquisition channels such as search (Google) and metasearch. However, the opposite has happened. See here the Variable Costs (of which Marketing Costs are the largest component) as % of Revenue Margin:

eDreams Odigeo Variable Costs as % of Revenue Margin

Hotels Using NFTs for various applications

Wall Street Journal article on how hotels are starting to convert room nights into nonfungible tokens (NFTs). The article highlights Pinktada, a recently launched hospitality token marketplace with hotels in the Caribbean, Mexico, San Francisco and Hawaii, where room-night tokens (RNT) can be purchased or sold at any time. The sale is final from the point of view of hotel owners, so their revenue is guaranteed whether or not the room is used. If travelers change plans, they can use the tokens for other Pinktada hotels or sell them to another traveler in the Pinktada network. Another startup using NFTs is Stay Open, which converts unutilized retail and office space into hostel-like lodgings.

Marriott launches hospitality industry’s first media network

Marriott launched the Marriott Media Network, using its first party data to give advertisers an omnichannel solution for reaching high-intent travelers on the path to purchase, pre-arrival and during their stay. The network aims to provide premium ad inventory over a variety of Marriott’s owned channels on which brands can deliver curated experiences. The launch, which Marriott claims is a first for the hospitality industry, follows explosive growth in the retail media space as advertisers look to better target and track consumers amid a tightening of data privacy rules on other digital platforms. Read more: Marriott launches hospitality industry’s first media network

Uber Travel

In April, Uber announced that later this year its UK customers will be able to book trains, buses and car rentals on the app. A couple of weeks ago it released new travel features that allow customers to reserve rides for each leg of their travel itinerary, by simply connecting their Gmail account. Uber Travel is available in the US and in the coming weeks in Canada. Read more: The world is in your hands

Short term renting is back with a new face

While travelers are now less constrained by time thanks to changing work habits, many are going back to short term rentals and the sector is shaping up. According to Phocuswright research, by the end of 2022, gross bookings will reach €37.5 billion. It’s a global trend too – San Francisco based Hostfully just scored $4 million to help manage guest bookings and comms.

Travel is flying to the blockchain

Chain4Travel wants to build a blockchain platform for B2B and B2C leisure travel products and has just raised CHF4.3 million for its blockchain-based travel platform, known as Camino. The token pre-sale is due to take flight this summer – we’ll be watching how this goes.

Let’s talk about diversity?

WeTravel has just launched a Women in Travel vertical in its academy. Intended to brng any individual who identifies as female or with femininity in travel together in one place, the vertical will focus on intersectionality, creating inclusive travel experiences and empowering equal outcomes.

It’s time for accessible travel

We aim for travel to be a joyful experience, one that hits all the senses. No one should be restricted or discriminated simply because of their ability. That’s why Mobee has built a platform for travelers with reduced mobility or disabilities and they’ve just picked up €1.5million.

Hotel or apartment: why not both?

Combining the luxury service and reliability of a hotel with the amenities and convenience of a home, Mint House has just brought in $35 million. The company is transforming the traditional hotel industry with a tech-first approach, and I love it.

Ranking remote working cities

Remote work is now firmly embedded in the travel industry, we know it. And as many are shaping their strategies to accommodate these new needs, Workmotion has just released a study ranking 100 cities worldwide based on the concentration of local talent, local salary levels, and remote working infrastructure. Interesting to see how the sector grows from an analysis like these.

When startups and corporates get together

Yes. This is one of my favourite approaches when it comes to innovation. Norwegian airline Norse Atlantic is now going to work with EveryMundo as its provider of fare marketing tech. The startup will be able to benefit from the corporate efficiency to establish brand awareness and recognition to fuel bookings, while the corporate can also benefit from increased traffic from the Nordic region. Win-win.

Travel is going high-fashion

Travel is fashionable – and now we can say that in every sense of the word. The iconic Elle Magazine has just joined the travel world with the launch of Elle Hospitality. Featuring two boutique hotels (Maison Elle and Elle Hotel) the new venture is a high-end chic concept and marks a new wave of multidisciplinary crossovers in the industry.

Will sustainability hold travel back?

Sustainability is the mot du jour, and across industries, different initiatives are being adopted. In travel, this has been much more than just a buzzword: as travel demand hots up again, so does traveler demand for sustainable choices. But we are still wondering if the industry is keeping up and if the solutions are being adopted fast enough?

Iceland did it again.

Just 6 months after their parody of Mark Zuckerberg’s Metaverse launch video, Iceland now launched OutHorse Your Email. The idea comes from realising that many tourists keep checking their working emails during their holidays, and they suggest outsourcing the replies to one of their iconic Icelandic horses. As they say, nothing ruins your vacation like work. This is brilliant – I love it.

Travel loves fintech.

In their most recent report Amadeus identified payments as a priority among nine out of ten senior industry respondents, forecasting a big fintech “investment boom” in the upcoming months. The research found four out of five companies plan to match or surpass their 2019 fintech investment this year, with nine out of 10 identifying payments as a priority.

Ready to hit the open road.

Camping is having a comeback and the rental marketplace is hot enough to toast marshmallows. Campervan rental platform, Campiri, connects people who want to hit the road and travel with a campervan with private owners and rental companies. The Czech company just pitched up its market position with an additional €2.7 million of funding.

Can we travel worry-free?

Let’s be honest – sometimes things don’t go as planned. From cancelled trips to lost bags, travel can have some unexpected complications. Digital travel insurance vendor Faye has just come out of stealth mode with $8 million of fresh capital. Their app is helping users keep a track on travel insurance, get real-time alerts and get reimbursed fast should something happen.

Business travel is getting busy.

Corporate travel booking platform Hotailors is flying international with a new €23 million investment and will rebrand to ‘WorkTrips.com’. The Polish company specialises in handling work trips for external employees – perfect for the return of in-person events and conferences.

Exceptionally cool short-stay accommodation.

Finnish Bob W wants to bring users short-stay accommodation that lies at the intersection of hotel luxury and rental authenticity. They just bought their biggest competitor, Estonishing Stay as the space begins to get crowded.

Home swapping is an up and coming trend we’ve got our eye on.

Members-only home-swapping startup Kindred has landed $7.75 million to connect homeowners and renters who want to swap homes for a while. The plan is to keep it sustainable and community-centric, with a focus on sharing rather than monetizing.

Crowded restaurant tables are back.

It’s no secret the food and hospitality sector has been hit hard by the past couple of years, but technology has been a main driver of their rebounce. With the aim to boost the success of businesses in this space, SpotOn has just plated up a decadent $300 million and is growing in the restaurant sphere.

Airbnb like we’ve never seen it before.

Airbnb shook up the travel sector 10 years ago when it erupted into this sector, and now, it’s doing it again. With a new approach to searching and discovering beautiful destinations, as well as an incredible 150 new upgrades, the platform is keeping fresh. Can’t decide which property to choose to stay in? (We’ve been there too, we get it) Well, now guests don’t have to pull your hair out deciding – choose to split stay.

Explore. Work. Travel. Repeat.

That seems to be the future for people working in travel companies anyway. Airbnb announced that employees can live and work anywhere in the world and now Klook is doing something similar. Employees at these big travel firms are tapping into the growing travel bug amongst Gen Z and millennials to attract and retain talent and it’s paying off.

Fully subscribable holidays.

The days of scrimping and saving for your dream holiday might soon be a thing of the past. And no, it’s not because you won the lottery, but rather because travel is going subscription-based. Japanese startup Kabuk Style already has thousands of travelers booking hotels and guesthouses via subscription and with a recent promotion with the airline JAL, their profile is now going mainstream.

The future of search is boutique

Sari Azout writes that in a world of infinite information, it’s no longer enough for horizontal search engines to organize the world’s information. It becomes increasingly important to organize the world’s trustworthy information. On the other hand, vertical search aggregators work when you know exactly what you want. But knowing what you want isn’t usually the starting point, which creates an opportunity to help the overwhelmed consumer with better discovery and curation along the funnel by building boutique search engines that index, curate, and organize things in new ways. Read more: The Future of Search Is Boutique

Hopper’s journey and super-app ambitions

All travelers worry about something, but not about the same thing. And this is good for Hopper. Insightful interview with Fred Lalonde, CEO and founder of Hopper. He discusses:

  • How he got 1 million users in 1 day when he was building Hopper.
  • Why he decided to launch as a mobile-only product when less than 10% of digital travel was booked on mobile.
  • How Hopper was able to corner the millennials and Gen Z, which make up 75% of their customer base.
  • How they got 70% of Hopper’s revenue to come from Fintech, with at least one fintech add-on attached to 70% of travel transactions.
  • The changes in anxiety dynamics across different travel products (air, hotel, car).
  • To become an Asian-style travel super-app, either travel companies will add high-frequency purchases to their product, or a high-frequency apps (like Uber) will get into travel. It has to end with a couple of companies that offer a lot of things, travel being one of them.
  • How they are looking to the East for inspiration of where the future of travel is heading, and how social behaviour and engagement, directly traded for commerce (like lower prices) is foundational .

Framework for navigating down markets

According to a16z’s experience, when the market tanks, founders crave advice that goes beyond the platitudes and provides a tangible framework to quantify the change in valuations and what it means for charting their future course. This post offers the diagnostic framework that a16z uses when they sit down with founders:

  • Reevaluate your valuation
  • Understand your burn multiples
  • Build scenario plans

Forward Revenue Multiples for Public Software Companies

Life paradoxes

Sahil Bloom put together a handy list of 22 life paradoxes. A couple of them:

The Effort Paradox. You have to put in more effort to make something appear effortless. Effortless and elegance are the result of a large volume of consistent, effortful, gritty practice. Small things become big things. Simple is not simple.

The Persuasion Paradox. Have you noticed that argumentative people rarely persuade anyone of anything? Persuasive people don’t argue—they observe, listen, and ask questions. Argue less, persuade more. Persuasion is an art that requires a paintbrush, not a sledgehammer.

Life paradoxes

Contextualizing consumer sentiment in the ongoing pullback

Worth taking a look at the deck that Meera Clark (Redpoint Ventures) published focused on US consumer sentiment. Thanks to Jonathan Newar, founder and CEO of Captain Experiences for sending me the report and his conclusions as it relates to the travel sector:

  • Consumer spending is still hanging in there, led by high income households spending on travel.
  • Consumers with income over $75k have increased their appetite for domestic travel relative to pre-covid.
  • With their investment portfolio down, younger people might get their adrenaline fix through travel.
  • Travel remains a bright spot for growth.
  • Publicly traded travel company multiples are the highest among consumer sectors, with a EV / Revenue multiple of 7.8x (mean) and 7.6x (median).

We will always be caught by surprise

People are good at forecasting the future, except for the surprises, which tend to be all that matter. We can never see the most impactful events coming. Morgan Housel shares his theory about risk and the right amount of savings (they should feel excessive) required to offset it. Read more Morgan Housel at Never Saw It Coming

Booking.com CTO on the shift from a build-first culture to adopting SaaS and IaaS

Before taking over as Booking.com CTO, Rob Francis was director of corporate infrastructure at Amazon – where he led a migration of Amazon’s infrastructure from legacy data centres to AWS. In this interview, Rob goes over how Booking is having to modernize its digital infrastructure, going from monolithic architecture to distributed services, from data centres to public cloud, from a build-first culture to adopting SaaS or IaaS, adopting new frameworks, new languages and new ways of doing things with Big Data and Machine Learning. Read more at The Stack: The Big Interview: Booking.com CTO Rob Francis

Fundraising

  • Poland-based Hotailors closes a €23 million round and rebrands to WorkTrips.com. The funds will be used to expand to new markets and build new products around Fintech.
  • Sustainability-focused travel experiences company Intrepid Travel invested $7.85 million in Australian off-grid accommodations provider CABN.
  • Members-only home-swapping startup Kindred closed a $7.75 million seed funding round to help owners and renters take advantage of work-from-anywhere flexibility. Andreessen Horowitz led the round, with participation from Bessemer Venture Partners.
  • Mirai Flight, a London-based booking platform for charter flights, air taxis and private jets raised $3 million in funding.
  • Campiri, a Czech camper van rental marketplace, added €2.7 million to its seed round, bringing the total seed funding to €4.6 million. The investment was led by Rockaway Ventures
  • Arrivalist, a destination data intelligence startup, raised a $2 million debt financing investment round.
  • Katanox, an Amsterdam-based fintech platform and startup that connects accommodation suppliers and travel sellers raised $5 million and added Expedia executive Rob Torres to its board.
  • French hotel booking platform CDS Groupe acquired expense management provider Rydoo‘s travel platform. Read more: Rydoo Sells Travel Tool to CDS Groupe

A quickstart guide to positioning

A shift in positioning can completely transform how we perceive a product and can mean the difference between success and failure. April Dunford wrote “Obviously Awesome” a reference book on positioning for tech companies. On this post, she writes a practical and to the point guide to nailing your product positioning. She defines positioning as ‍how your product is a leader at delivering something that a well-defined set of customers cares a lot about and explains the 5 distinct components that make up positioning and how the magic happens in the relationship between these components.

  • Competitive Alternatives – If you didn’t exist, what would customers use?
  • Key Unique Attributes – What features/capabilities do you have that alternatives do not?
  • Value – What value do the attributes enable for customers?
  • Customers that care – Who cares a lot about that value?
  • Market you win – What context makes the value obvious to your target segments?

She also highlights some of the common positioning traps and how to avoid them.

A quickstart guide to positioning

Managing your mental health while running a startup

According to a study by the University of California San Francisco, 1/3 of entrepreneurs suffer from depression, about twice the rate as the study’s control group. Okta co-founder Frederic Kerrest writes on managing your mental health while running a startup and gives tips to stay mentally, emotionally, and physically fit. Mental health among entrepreneurs is generally an under-discussed topic which might well be the most important for long-term success. This is particularly relevant to keep in mind in times of turmoil. Read more: Managing Your Mental Health While Running a Startup

An ingenious way to travel and explore the world

This man built a rail cart and rides it along abandoned railway tracks in California and Mexico. If you’re inspired and want to build your own rail cart, here you have some instructions. Just be careful to ride it on abandoned tracks!

Revenge travel Q1 2022 revenues

A few travel companies have announced Q1 2022 revenues and year on year growth rates:

  • Marriott: $4.2 billion Q1 revenue, +81% year over year growth
  • Booking.com: $2.7 billion, +136%
  • Expedia: $2.2 billion, +81%
  • Airbnb: $1.5 billion, +70%
  • Accor: €701 million, +85%
  • Tripadvisor: $262 million, +113%
  • Vacasa: $247 million, +91%
  • Inspirato: $82 million, +67%
  • Sonder: $80.5 million, +155%

Tips for times of crisis, from TravelPerk founder and CEO Avi Meir

Avi Meir wrote a thoughtful Twitter thread (unrolled for easier reading) with actionable advice to entrepreneurs on what they can do to survive, emerge stronger and turn lemons into lemonade during times of crisis. “Many founders and investors freaking out right now. As the CEO of a VC-backed business travel startup that just went through 2 years of crisis and thrived, doing atm 10x revenue vs. pre-covid ($100m ARR) w/ much stronger company, here are some tips to thriving in crisis”.

Recessions and bear markets have proven to be breeding grounds for innovation. In addition to TravelPerk, other startups who either launched and/or accelerated their growth during a downturn include Airbnb, Hopper, GetYourGuide, Vacasa, SilverRail, Adara and Joby Aviation.

Peacetime CEO/Wartime CEO

Peacetime and wartime require radically different management styles, but peacetime CEO techniques get a lot more attention and praise. Right about now is a good time to revisit Ben Horowitz’ (a16z cofounder) Peacetime CEO/Wartime CEO post from 2011. Some of the differences he highlights:

Peacetime CEO… Wartime CEO…
Spends time defining the culture Lets the war define the culture
Always has a contingency plan Knows that sometimes you gotta roll a hard six
Does not raise her voice Rarely speaks in a normal tone
Strives for broad based buy in Neither indulges consensus-building nor tolerates disagreements
Knows that proper protocol leads to winning Violates protocol in order to win

A new travel insurance player built to help things go right, rather than wait for things to go wrong

Israeli travel insurance startup Faye announced a $8 million seed round. Faye is looking to set a new standard to the normally confusing and legalese-filled world of insurance by offering a person-first approach, real time assistance, quick claims resolutions and reimbursement. Customers have come to expect a friendly, positive and intuitive experience in their interactions with most consumer products and services, but this has seldom been the case in insurance. Faye looks to overdeliver in an industry oftentimes synonymous with doing the opposite. Faye was co-founded by Elad Schaffer and Daniel Green, and the team includes professionals with prior experience in Lemonade, Allianz and Guesty. Best of luck to them.

In the past couple of years, insurtech startups have raised significant rounds to disrupt the insurance industry, among which are Cover Genius (USA, $72 million raised in Sept 2021), SafetyWing (Norway $35 million in April 2022) Sensible Weather (USA, $12M raised in May 2022), battleface (USA, $12M raised in Dec 2020), Koala (France, $2.2M in Jul 2020), Coverfox (India, $3.9M in Apr 2020). Larger companies have also upped their game to address the insurance opportunity. Outdoorsy launched a new insurtech division in Feb 2021 and raised $120M in June 2021 to support its Roamly insurance product; Booking.com created a Fintech division in July 2021 intending to hire up to 400 professionals; OTA Hopper doubled in size during the pandemic with a fintech-first strategy; Airbnb just introduced Aircover (in next story), which includes various traveler protections on each booking.

Airbnb 2022 Summer Release

Brian Chesky introduced on Wednesday what he called “the biggest change to Airbnb in a decade”. It consists of:

  • Airbnb Categories. collections of homes organized by what makes them unique (camping, countryside, arctic, OMG, etc….)
  • Split Stays. Shows up when searching for stays longer than 1 week and splits the trip between different homes (one in Joshua Tree, another in Zion, for example)
  • Aircover for guests. Travel protection included free for all stays, covering booking protection guarantee, check-in guarantee, get what you booked guarantee and 24 hour safety line.

Not to be flippant, but I thought this tweet was pretty funny…

Read more: The Airbnb 2022 Summer Release: Introducing a new Airbnb for a new world of travel

Fundraising

  • Pollen, a London-based travel provider for music experiences and events, raised $150 million in a Series C round.
  • SafetyWing, a startup born in Norway and now HQ in SF that provides health insurance to remote workers and digital nomads secured $35 million in a Series B round.
  • European ground transport specialist Bookaway Group completed a $35 million Series C round. Bookaway wants to make it as easy for travellers to search, shop, book and pay for ground transport as it is for flights and hotels.
  • New York-based residential hospitality startup Mint House raised $35 million in a Series B round led by Mohari Hospitality.
  • Bounce, a SF-based startup that connects users that need short-term luggage storage, with businesses (hotels, dry cleaners and other local businesses) in 1000 cities around the world raised $14 million in a Series A round led by a16z to expand across key markets in Europe.
  • Weather coverage startup Sensible Weather raised $12 million to insure travelers against unwanted weather (for when the snow is too watery, or the wind doesn’t show up to your windsurfing trip, or the sun is missing in your caribbean escapade).

Partnerships and announcements

The travel transformation

Reflecting a new generation of travel, where travelers are looking for apartment-style accommodation with hotel-level amenities, Mint House has raised $35 million for its pioneering tech catered to the new wave of ‘work from anywhere’ and the blending of business and leisure travel.

Search differently and discover more

Rethinking how we ask questions can give us new conclusions and new discoveries. With this in mind, Airbnb is making a big change in travel – how we search and find amazing destinations.

Booking charter flights at a click

We don’t need much temptation to travel, but we do love when booking flights is super simple. Mirai Flights has just raised $3 million for its instant booking app for charter flights and is planning to scale.

Travel agents are going digital

Going to the travel agents office is something we look back at with some nostalgia, but we generally just don’t have time to do anymore. TravClan wants to help travel agents boost their online presence and build trust in booking travel online – and they’ve just secured $4.7 million to help travel agents digitalize.

Robots, pets on tour and cybersecurity

While celebrating National Travel and Tourism Week it’s a good time to take a look at the trends that have been shaping and will continue to influence travel into the future. Tech is continuing to make big transformations in the sector and it is increasingly about enhancing experiences, rather than replacing them. Robot bartender on flight or a VR try-before-you-fly anyone?

Travel (carbon) light

Travelling sustainably is one trend that’s here to stay, and should be. Now, Wayaj has launched a new hotel booking engine that lets guests book sustainable destinations and offset carbon emissions at checkout. The product, Alight, is empowering us to make more conscious choices – one of the first of its kind in the industry.

Inspired to contribute to sustainable travel?

The 3rd CASSINI Hackathon is taking place on 12-14 May and today is the last day to register! If you have an idea using space tech to reshape Europe’s travel and tourism sector, make sure to register now and inspire a new generation of discovery.

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